By Justin Sink & Shannon Pettypiece

"The Fed has gone crazy," he told reporters on Wednesday as he arrived in Pennsylvania for a campaign rally. "So you can say that well that's a lot of safety actually, and it is a lot of safety, and it gives you a lot of margins, but I think the Fed has gone crazy."

Donald Trump has again criticised the Fed for raising interest rates.Credit:Bloomberg

Loading

White House Press Secretary Sarah Sanders said in a statement following the close of markets that the US economy is "incredibly strong" despite the selloff, which analysts attributed in part to trade tensions with China.

Advertisement

"It's a correction that we've been waiting for for a long time," Trump said. He frequently celebrates publicly when the stock market reaches new highs, pointing to the gains as affirmation for his economic policies.

Trump was briefed on the market turmoil earlier in the day, a White House official said. He has repeatedly criticised the central bank for raising interest rates this year, decisions aimed at preventing the economy from overheating.

"The fundamentals and future of the US economy remain incredibly strong," Sanders said in a statement. "President Trump's economic policies are the reasons for these historic successes and they have created a solid base for continued growth."

Wall Street had its worst day since February overnight.Credit:AP

US stocks tumbled Wednesday the most since February as fresh concern about the impact of the trade war with China roiled technology and industrial shares. The broad selloff took the S&P 500 to the lowest in three months, the Dow Jones Industrial Average plunged as much as 836 points and the Nasdaq 100 Index tumbled more than 4 per cent for its worst day in seven years.

The sell-off came a day after the International Monetary Fund said the world economy is plateauing and cut its growth forecast for the first time in more than two years, blaming escalating trade tensions and stresses in emerging markets.

Trump has slapped tariffs on $US250 billion in Chinese goods this year, and Beijing has retaliated with levies of $US110 billion of American products. The IMF projections don't take into account Trump's threat to expand the tariffs to effectively all of the more than $US500 billion in goods the U.S. bought from China last year.

During an event earlier Wednesday amid the selloff, Trump and his top economic adviser, Larry Kudlow, said they believed the US economy was strong. "It is doing well," Trump said.